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If you’re thinking about selling your self-storage or mini-storage facility, it’s important to consider all your options carefully. This is a big financial decision, and you shouldn’t make it lightly.
There are two main ways to sell your self-storage facility:
Listing your self-storage units with an agent
One option for how to sell your mini storage units is to list it with a real estate agent. This can be beneficial if your facility is large and high-performing, as brokers can reach a wide pool of potential buyers. However, there are some drawbacks to this method, such as paying commissions, fees, and an agent’s competing priorities of selling multiple storage properties for other owners.
Finding an investor to purchase the storage facility
The second way to sell your mini storage is to sell it directly to a buyer.
While this can have the disadvantage of not offering the property to the wider market, it can have a number of advantages, as discussed below:
1. No Real Estate Commissions
When you sell your self storage or mini storage, there is no commission to pay a broker or real estate agent. This typically saves a storage seller thousands of dollars in fees.
An example of this would be if your facility were to sell for $500,000. This would mean that you would have to pay the agent or broker $30,000 in commissions alone! However, if you choose to sell your self storage facility directly to a buyer, this fee can be eliminated entirely.
2. Details About Your Self-Storage are Communicated
Although it is not intentional, miscommunication often occurs between brokers, the sellers they represent, and buyers or buyer’s agents. This is because brokers have a lot of different responsibilities and are handling several different types of commercial transactions at the same time that they are selling your property.
When buyers and sellers communicate, they often use different platforms like email, phone calls, and in-person conversation. Since these messages aren’t always sent right away, small details can get distorted by the time they reach the buyer. This is called the “whisper down the lane” effect.
If the broker is not truthful about the mistakes, like when selling storage with high vacancy, it can also damage the buyer and seller’s confidence in each other and sometimes ruin the entire deal. When you’re working with the buyer directly, there isn’t the same chance for these mistakes to happen.
3. No Distracted Storage Brokers
Brokers who are paid through commission can sometimes be more interested in making a sale quickly, rather than working with a particular client. If a property is more expensive or in better condition, the broker may focus their attention on it in order to make a larger commission.
4. Ability to Maximize Selling Options
Selling commercial real estate can be mutually beneficial for both sellers and buyers. By working together, they can come up with creative transactions that satisfy everyone’s priorities.
There are various ways that the seller can help the buyer with financing, such as carrying the mortgage themselves or providing assistance with maintenance and vacancy issues. The seller may also be able to take advantage of tax benefits by selling the property through an installment sale.
When buyers and sellers can work together directly, it often leads to great outcomes for everyone involved. However, many brokers and agents sometimes get in the way with their “in the box” thinking.